Pru sells shares to stay safe

Prudential is warning of turbulent investment conditions ahead, having sold billions of pounds worth of shares in recent months.

The insurer has restructured the assets in its £70 billion with-profits fund. It moved from having 70 per cent of the fund in shares and property at the start of 2009 to just 54 per at the end of the year.

Martin Brookes, who manages the fund, says: 'Having done well last year, we have taken profits. We're focused on protecting capital.'

Safety first: Prudential is focused on protecting capital

News of the changed stance came as Prudential announced its with-profits bonuses last week, involving the endowments, pensions and bonds of four million savers.

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The main with-profits fund grew by 18.7 per cent during 2009. This is better than the 14 per cent announced by Legal & General a fortnight ago and almost three times the 6.6 per cent return that Aviva managed in 2009.

Total policy payouts have been cut back, however. A benchmark 25-year £50 a month Prudential endowment now pays out £35,834 compared with £37,738 last year.

A £200-a-month personal pension invested over 20 years now pays £93,538, compared with £96,238 last year.